High shipping rates affect small businesses

Local small businesses that ship their products are raising concerns about the 4.9 percent cost increases United Parcel Service and FedEx began charging in the past two weeks.

Sable LeFrereStaff Writer

Local small businesses that ship their products are raising concerns about the 4.9 percent cost increases United Parcel Service and FedEx began charging in the past two weeks.“It is ridiculous how they are increasing these prices and making it more difficult for companies and individuals to ship items, especially with the economy the way that it is. It takes a toll on one’s budget,” said Shantell Neil, who manages her family business, Mr. Pete’s Cajun Spices in Houma, with her husband Corey.Mr. Pete’s Cajun Spices uses UPS and FedEx, and Neil said the higher rates could affect their business.Neil said she thought the companies’ rates were high even before UPS rates went up Dec. 31 and FedEx’s did Jan. 7.“We did notice a significant increase in their shipping service around the holidays,” Neil said.What makes things so difficult for the company is shipping its gift baskets. For simpler orders with just seasoning, Neil said they are able to get by with the flat-rate packaging the U.S. Postal Service offers.“It doesn’t matter how much it weighs. Anything less than 70 pounds, you can ship as long as it fits in the packaging they give you, which is also no extra cost. It’s very cost effective when you think about it,” she said. “Our gifts baskets can’t fit in those boxes, so we have to use UPS and FedEx.”The couple relies heavily on their online retail store to reach local and out of state customers and will have to find ways to keep costs down, Neil said.One option Neil said she is going to look into is other types of packing options USPS offers. She said is she also going to consider looking into packaging the product herself.“I have different suppliers I go to for packaging that I can get at different prices. It would be more cost effective to package them myself and ship them through U.S. Postal Service,” she said.Neil said they may even have to look at product pricing to keep their free shipping option for customers.“We do have a minimum shipping order before the free shipping. We may have to raise the minimum price in the future. But that would be something we would have to discuss,” she said.Mr. Pete’s has a $75 spending minimum for free shipping that Neil said customers use a lot, especially for their gift baskets that can cost up to $200.“Most people would want to pay $10 to $15 extra instead of paying for a $25 shipping rate. During Christmas time more people were doing that,” she said.The shipping increases, Neil said, make her worried about the future of the business. “If shipping continues to increase, our online shoppers will eventually start looking in other places and go to larger retailers that will be able to still offer free shipping while us small businesses are going to feel the negative effect of it,” she said.Tom Badeaux, owner of Qwik Pack and Ship in Thibodaux, said the increased rates didn’t surprise him.“I think being in business for a long time in different industries you see price increases. I don’t want to say always, but the vast majority of price increases are ultimately passed on to the consumer,” Badeaux said. “That is just how it goes. It’s the nature of the free enterprise system.”Qwik Pack is an authorized shipping outlet for UPS and FedEx. When their shipping rates increase, Badeaux said outlets like his have to comply with the change. “I’ve been in the business for three years, and this is the first time I’ve seen a rate increase,” he said.The shipping companies said several factors, including fuel prices and updating or replacing equipment and vehicles force them to periodically evaluate their shipping rates, surcharges and fees.For more information, go to www.rates.ups.com and www.fedex.com/us/2013rates/index.html.

Staff Writer Sable LeFrere can be reached at 857-2204 or at sable.lefrere@houamtoday.com.

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